My life has been absolute chaos for the last six months and I haven’t had time to do much except the essentials. After my husband and I finally closed on our house, we were faced with the massive chore of packing up everything we own, moving into said house, getting everything set up in our new place, and cleaning up our old apartment (that part was the worst). We accomplished all this without taking any time away from work, which is why we’re still sleep-deprived weeks later.
After completing this process that was 2 years in the making, I had a random curious thought: how much of my hard-earned money had I actually blown on rent over the past 15 years?
I added it up, and the result was shocking. I moved out of my parents’ house in 2004 when I was 20, desperate to live my own adult life and have privacy. My first apartment was a tiny 1 bedroom and it was $400/mo; I never imagined how much money I’d eventually end up spending on rent. When I added up my 9 years renting in Ohio and my 6 years renting here in North Carolina, I spent roughly $105,420 on rent. What?!
It’s true. Renting is basically throwing your money in a barrel every month and burning it. You don’t build any equity and you better bet you’ll be homeless the next month if anything happens to you that prevents you from being able to afford your rent. Landlords know (especially in the area of NC where I was renting) that they can put a fresh coat of paint on that apartment and charge the next poor sap even more, so why would they care? The rental market in these type of areas is a racket designed to keep owners rich and renters poor.
The problem is that they make it too damn hard to buy property these days. Almost anyone who has income of any type can walk into a rental office and overpay for some crappy apartment that’s barely been maintained for the last 20 years, and they’ll be charged more and more for that same unit every time they renew the lease. If that same person wants to actually own property, however, they better have perfect credit, little-to-no-debt (sorry to anyone who wasn’t rich enough to afford school without loans), a shit ton of money to spend up front, and endless hours to spend digging up documents that are supposed to prove they can afford the mortgage.
Don’t get me wrong, I understand the need to assess risk when issuing loans. Here’s what I don’t understand. I could get the keys to an $1100/mo apartment by simply submitting a document or two that shows I make enough money to cover the rent. In order to qualify for a mortgage that’s only $800/mo, underwriters demand years of pay stubs, W-2’s, account statements, and more. They try their hardest to find some technicality they can use to deny the loan at the last minute and send you scrambling to find a new overpriced apartment. Oh, and if you’ve dared to escape from corporate hell and become self-employed, don’t even bother unless it’s been at least two years. Apparently, putting up with corporate bullshit is now a prerequisite to home ownership.
In generations past, it was commonplace for young adults to own property soon after establishing careers and families. It’s the American Dream. Now, a lot of millennials in their late 20’s and even 30’s are unable to even consider owning a home because of how the system is rigged against them. They’re living with parents well into their 30’s in some cases or renting obscenely overpriced apartments that they have to share with several roommates, and the combination of inflated rental prices and stagnant wages make it difficult to save up any kind of down payment. The American Dream has become the American Nightmare.
So, I’m still ridiculously elated that my husband and I were able to accomplish this huge goal in our early-mid 30’s. However, I’m also sad that we’re in the minority of middle-class people our age (people who have lots of family money don’t count here; of course they have houses) while the majority of young non-trust-fund-having people cannot afford or qualify to own property, even after working hard to get advanced degrees and build successful careers.
I don’t know exactly how to accomplish it, but we need to make it easier for hardworking middle-class folks to buy homes. We’re talking about people who worked hard to get their education and find some aspect of society they can benefit in their careers; it shouldn’t be too much to ask for them to be able to pay a mortgage that’s building equity for the future rather than being stuck in an endless cycle of ever-increasing rent. I’m not a fan of big government, but there are a few things the government could do to help. For one, the minimum wage needs to be increased. Nobody making $7.25/hr can afford to live anywhere other than their parents’ basement or their friend’s couch. The cost of everything we buy has risen drastically over the last 10 years, and so have the salaries of CEOs, but the wages of working people have remained stagnant. Next, programs like USDA (an option for zero-down home buying) need to be amended so that they don’t penalize people for having student loans. Those of us who aren’t lucky enough to have rich and generous parents had to take out loans to go to school in the hopes that we could make more than…$7.25/hr. Finally, we need to make mortgages more available to self-employed people because our money is just as green as Joe Corporate’s money. In fact, many self-employed people make more money than they would in corporate hell, and we’re also more motivated to earn that money in many cases because we’re on our own in that business. We’re not just punching a clock and then waiting for 5 pm.
I am living my very own American Dream and all I want now is for more people to be able to live the dream as well. This country wasn’t founded to favor millionaires and walk all over the middle class, so why is that exactly what’s happening? What can we do to fix it?